The sub-head in the Free Press proclaimed
“Big chill descends on house market.” Now,
the Winnipeg Realtors and ComFree disagree
on many things, make that almost everything, but
probably not on use of the term “big chill” to
describe Winnipeg’s resale housing market. We
would both beg to differ.
There is no “big chill.” Our current market is only
“chilly” in the same way that Death Valley in
August is chilly compared to the sun’s core.
What can be said is that this year’s market is sane.
Sanity is always more comforting than insanity, and
insanity is what we experienced the past few years
as too many buyers chased too few homes.
Resulting bidding wars ended with too many buyers
frankly overpaying. And, in the end, that was
only possible because the banks were willing to suspend
disbelief and bankerly caution and approve
pretty much any mortgage that came along.
The subprime disaster in the states ended that cavalier
mindset. Mortgage lenders this year are taking
a closer look and demanding greater oversight, such
as real appraisals, before approving loans.
We’ve heard more accounts in the last few
months of banks asking buyers to put down more
money because they feel the agreed-upon price is
too high.
Don’t forget, even though you may be preapproved
at a certain level, the mortgage lender also
reserves the right to pass judgment on the home’s
value to ensure it can recoup its investment should
you default.
You might say this market is one of enforced sanity;
enforced by the sobering effects of the financial
crisis, subdued consumer confidence (although it
remains higher here than elsewhere) and reduced
pent-up demand.
But there is no “chill.” Homes are still selling well and offers above list are still being
made. Last year, 39% of all ComFree sales sold for
above the asking price.; this year it stands at 22%.
Overall, 49% of ComFree 2009 sales have gone for
above or at list price.
While listings on both the ComFree and MLS
markets have held steady this year with 2008 levels,
sales on both are down: ComFree by 14% and the
MLS by 13%. But that is compared to the last year
of a five-year boom on the re-sale market marked
by over-exurberance by both buyers and lenders.
The over-exuberance is gone on both fronts, to be
replaced by sound lending and more prudent judgment
from buyers.
So, sellers, that’s not a bad thing, since most of
you will also be buyers. As sellers, you must accept
that your home must be competitively priced or it
will sit on the market until it is. There is more competition
from other homes this year and buyers are a
more sober bunch.
But, as a buyer, you can rejoice. There is little
chance you will be stampeded into over-paying for
your next home.
